While the deal has yet to be finalized, it represents a surprising new alliance between two warring sides in the operating system world. CEO Steve Ballmer made the announcement at a San Francisco news conference that Linux plays an "important role" in many companies, including Microsoft itself. "We see huge potential upside in these markets."

Novell's Suse Linux is currently the second largest commercial Linux distribution, with first place going to Red Hat. As a result of the announcement, shares in Novell jumped 16% to $6.79.

Financial terms of the agreement were not disclosed, but one of the high points is the expected construction of a joint research facility where the two companies can design and test their software together. Improvements in compatibility between Microsoft Office and OpenOffice are also expected.

Speculation about the long-term outcome of this union has begun already. Frank Artale, vice-president of XenSource, noted that Microsoft's embracing of Suse Linux as opposed to another particular variant could cause a "halo effect" in that the association between the two could make users choose it over another distribution. The open-source community also may have reservations about using a distribution that is "sleeping with the enemy."

As another part of the deal, Microsoft agreed not to file patent infringement charges against Suse users, and Novell has agreed not to sue users of Windows.

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I suspect this partnership has five possible explanations as to "Why?"

(1) This is a direct response to Oracle's move into providing services for their version of Linux. (undercut Red Hat in a way). So the timing is suspicious/obvious.

(2) Mono. (This is the open-source implementation of .Net)...This allows both Novell and Microsoft to combine a .Net framework that works with both Linux and Windows. Effectively, this can help increase the adoption of .Net development in general.

(3) MS is setting the pieces up to take on VMware. They have signed up with XenSource (open-source virtualisation solution), and are now teaming up with Novell. (an active Xen source promoter in their Suse Linux distro).

(4) MS has long been attacking open-source and Linux in general. (In 2001, when Steve Ballmer called them "cancer"). Its seems this year is a sudden change for Microsoft. Essentially, "If you can't beat them, join them". (They have tried: such as the "Get the Facts" campaign...But failed. Even the dude who came up with the idea for the campaign was fired!)

(5) This allows Microsoft to look like they're playing nice now...Since SUSE Linux comes from Europe (and has a big following there), this plays in good light infront of the EU.

This has absolutely, positively got NOTHING to do with Apple.

The only things I've seen MS reacting to Apple is:

(1) GUI and some of the default apps of Vista...Its very similar to OSX.

(2) Zune...Obviously a direct response to the iPod.

So how about you get out of your "Apple Reality Distortion Field" and see wtf is really going on in the REAL world.

The bottom line is the green buck, and microsofts attempt to control markets.
As for the EU thing, that's just ridiculous, suse isn't EU anymore for ages and people that do the politics in the EU would not even know what linux is let alone have heard of suse.
So what 'EU' are you speaking of? and what would it matter, you think the prosecuters will say "Oh you can continue with your illegal monopolistic practises now, you made a deal with the owners of suse and that used to be euro"?

As for an open source .net, well I think we'd both be struck by lightning several times sooner than that happening.

If anything this would be an attempt to lock down (suse) linux and make it less open source, not more.

I just feel that apple having windows run on apple computers would be felt as an encroachement by microsoft and by doing the same but reversed, namely have a linux-based OS run as secondary OS next to windows they would get a foothold in the linuxmarket and in the growing popularity of linux. after all, they even sell computers with just linux pre-installed now, not something microsoft appreciates I bet.

Incidentally, the EU does not hate what you would call 'american companies', the EU does not hate microsoft, just because they are held to laws doesn't mean they are hated.
Microsoft is quite big in the EU (as you can imagine if you give it some thought), with a large 'local' presence - and they even make the belgian national ID card I read.
So it's not like the EU spitefully 'attacks' microsoft because they are 'americans', that's a silly misconception.

The feeling that I, and many other Americans have, is that Microsoft is mainly getting in trouble in the EU because they are successfully competing against European companies in the market. The EU has not shown any actual damage to consumers, has been ineffective in its so-called "remedies" for consumers, and has been extremely irrational in its demands that it has made of Microsoft.

Also, I don't see any concept of fairness, since I don't see any similar prosecution of European monopolies by the EU. At least to me, the EU's actions seem random and humorous at best, and discriminatory and protective at worst.

paranoia is a powerful condition.
BTW, the companies that benefit from the EU's actions against microsft's monopolistic behaviour are all american companies it seems, but of course no argument will ever help agains paranoia.

I tell you the secret of why the microsoft thing is fought so fiercly, the EU woman who runs that show is a dutch women from up north, and that part of the county is known for its tough women, I think it's as simple as that.

TomZ, I agree with you entirely. The EU are being big bullies towards a more successful American company. I (more or less) live in the EU (UK) and I can't stand the useless rabble that is the European Parliament. I'm a consumer. I want a good product. I will buy whatever is the best product for what I want and if that's an American product, then I'm buying American. I don't want some nanny government trying to force me to but sub-standard "home-grown" merchandise because they don't like the idea that the Yanks made something better than them.

The EU are idiots who waste time on crap like this, instead of turning their attention to issues that governments should really be concerned with. Leave the free market, free, you jackasses.